SIE Regulatory Framework 3

Question 1

Under SEC Rule 144, how long must an affiliate hold restricted securities before selling them in the public market?

Accepted Answer

6 months

Answer

SEC Rule 144 requires affiliates to hold restricted securities for at least six months before selling them publicly.

Question 2

The Securities Act of 1933 primarily regulates:

Accepted Answer

The issuance of new securities

Answer

The Securities Act of 1933 governs the primary market by requiring full disclosure in connection with the offer and sale of new securities.

Question 3

A firm commitment underwriting arrangement means the underwriter:

Accepted Answer

Purchases all unsold shares from the issuer

Answer

In a firm commitment underwriting, the underwriter buys all securities from the issuer and assumes the risk of selling them to the public.

Question 4

Which of the following transactions would be exempt from SEC registration under Regulation D?

Accepted Answer

A private placement to accredited investors

Answer

Regulation D provides a safe harbor exemption from SEC registration for private placements sold to accredited investors.

Question 5

The 'cooling off' period after filing a registration statement with the SEC typically lasts at least:

Accepted Answer

20 days

Answer

The SEC has a 20-day review period after an S-1 registration statement is filed before securities can be sold to the public.

SIE - Securities Industry Essentials Practice Test